Shoppers pulled back at the holidays

NEW YORK (CNNMoney) -- Consumers pulled back on their spending in December despite the holiday shopping season, according to a government report released Thursday.

The Commerce Department report showed that overall retail sales rose only 0.1% compared to November -- falling short of forecasts of economists surveyed by Briefing.com, who were expecting a 0.4% rise. Excluding auto sales, which were relatively strong in the month, sales fell 0.2%; compared to forecasts of a 0.3% rise.

Part of the reduced spending came from lower prices. Lower gasoline prices trimmed spending at gas stations by 1.6% compared to November. And spending at grocery stores also declined 0.2% in the same period amid reports of some lower food prices.

Paul Dales, senior U.S. economist for Capital Economics, said it was somewhat positive that lower prices allowed non-discretionary spending to decline 0.6%, at the same time that discretionary spending rose 0.4%.

"It appears they're saving money when they go to fill up their cars, and spending it on something more enjoyable," he said.

Mark Vitner, senior economist with Wells Fargo Securities, said his firm's measure of "core" sales -- which excludes autos, gas stations and building materials -- posted the first monthly decline in a year. These excluded sectors are heavily influenced by volatile prices or by the business cycle.

"The decline here gets our attention," he said. "We do not think the consumer is completely going into hiding, but we do think that the pace of consumer spending growth is poised to slow."

Economists said that with other economic readings showing that stagnant wages were not keeping up with prices overall, and rising credit card balances, there's a limit in how much consumers will be able to spend -- even as a declining savings rate suggested that consumers were more willing to dip into savings.

"Households have realized that the savings only go so far," said Dales.

Disappointing December spending left overall sales up 6.5%, compared to 6% a year earlier which excludes auto sales.

Bucking the trend were clothing retailers, which enjoyed a 0.7% rise in spending; and a 1.6% rise at building material and garden equipment retailers, which Dales said may have been helped by unusually mild weather.